Shocked that companies and mutual funds would invest OPM (Other People's Money) in high-risk investments, the Shocked Investor was originally on a mission to find out if our money ended up in these dubious instruments. This blog now also discusses other financial topics, such as straddles, options, gold, natural gas, agri/food stocks, and the collapse of the US Dollar.

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Monday, April 12, 2010

A lot of pain need to come to Greece according to Dominique Strauss-Kahn, the I.M.F's Managing Director, who said today that deflation is the only viable way for Greece leave its current macroeconomic problems .

"The only effective solution to the rest of Greece is deflation. Exactly, as was correctly advised by the European Commission," he said in an interview with Austrian weekly magazine Profil.

"It will be painful. It will mean lower wages and lower prices. Greece should undo what it did in recent years,". "There is no other way to Greece but to raise competitiveness."

He also defended the introduction of an economic strategy and of stronger European policies, as well as greater coordination in fiscal policy among the member countries. He adds that the stability pact is not enough to keep the undisciplined members of the European Union undisciplined under control: "we need a joint European economic policy".

"In order to implement a more coordinated joint, Europe needs to create new regulations that, in emergency cases, can force individual countries to comply with the rules. " "We need a Europe that shows more teeth," said Strauss-Kahn.